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bricksandmorter

Is It Any Wonder In All Honesty?

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"Your home is at risk if you do neo keep up payments on any mortgages or loans secured on it"

Now, does anyone really take any notice of such a warning? Not many you can be assured.

Buying property should be viewed as a business venture, not a devine right nor a thing to be done simply because others all appear to be doing it and certainly not as it is now viewed, as an added pension for the future. The market is and always has been too volatile. Property is high risk.

Lets face it, by the time anything drifts down to joe bloggs as a good idea, the idea has already run its course and the horse has bolted.

One of the major problems currently affecting the housing market is the overrated buy to let mortgage con metered out by the money lenders over recent years. A very good idea in theory, but as said above, that horse had bolted a few years ago. Now we are left with too many joe bloggs with properties to let, flooding the market with letting properties which would normally be on the buying market. This has in turn forced prices of property in a lot of areas to unreachable status. Any get rich quick scheme will only work if you are one of the first to do it.

Now many of these buy to let mortgages will no doubt be moaning about not being able to make repayments adding to the number of repossesion figures. It will happen in greater numbers no doubt.

I did see a snippet on the news regarding a woman that had had to put her house on the market because her business was suffering. Well, hello, that could happen anytime, that could happen if you do not know how to run a business properly, that could happen if the type of services that business is offering are no longer needed-Thats business at any time in history not relative to the scaremongering going on now. Does this woman expect help because her business is failing? Life doesnt work that way and never has but appears that some almost expect it now for some reason. Of course we all can have sympathy for such a situation but how she repays her mortgage was her own descision.

What will the "experts" all be saying next week, that is anyones guess but rest assured that most of the knee jerk scaremongering will subside and level-headed discussion commence, hoorah!!

Edited by bricksandmorter

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We tell clients this with each and every transaction which involves a mortgage and you are right, they never listen. Its a bit like the section of the Mortgage Offer which tells you how much it will go up at the end of the fixed rate deal. Clients just think that they will remortgage at that point and so take no notice. Once a few of them get to that point with a not perfect credit rating and can't remortgage then maybe they will realise their mistake.

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The market is and always has been too volatile. Property is high risk.

Surely the normal state of affairs is that property is not high risk, unless you've stretched yourself to buy and lose your job or something.

In normal times the biggest perceived risk associated with buying a property is with hidden problems like subsidence, damp or troublesome neighbours, not with falling prices.

I'd be the first to admit that property is high-risk financially now, though.

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Surely the normal state of affairs is that property is not high risk, unless you've stretched yourself to buy and lose your job or something.

In normal times the biggest perceived risk associated with buying a property is with hidden problems like subsidence, damp or troublesome neighbours, not with falling prices.

I'd be the first to admit that property is high-risk financially now, though.

I sort of agree with you. The problem is, as HPI has raced away the percieved risk to the illinformed seems to dimish....as they think that no matter what, prices will charge ahead at the same rate, so If they hit probolems they can just sell and take their "earnings" out.

Unfortunately, when any market (partcularly housing) reaches the stage where the ill-informed herd percieve there is nothing to lose, there are problems. They are always the last into the market and the ones who'll get hurt the most.

See American sub prime.....you can just see the mortgage salesmen flogging the loan can't you?

"Look at this graph, prices have gone up by x% over the last 5 years. If you can't pay, sell up and you would have made a fortune anyway, easy peasy!" .....and then, bang.....not just housing meltdown this time, but financial meltdown.

As a similar situation: see Gold. One of my friends (that has recently just had an offer accepted as a FTB) is also spouting the merits of buying gold!!!!!!

Double whammy for him when the brown stuff hits the fan i'm afraid to say.

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We tell clients this with each and every transaction which involves a mortgage and you are right, they never listen. Its a bit like the section of the Mortgage Offer which tells you how much it will go up at the end of the fixed rate deal.

Or the bit where the stewardess goes through the safety routine -- yeah yeah, heard it all before and anyway the plane isn't going to crash, the pilot would never allow it... ;)

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...... and certainly not as it is now viewed, as an added pension for the future. The market is and always has been too volatile. Property is high risk.

In the absence of a correctly funded Government pension; property is fine as a pension, especially as part of a portfolio. Pensions are the longterm, so is property. Property is not volatile; it's prices still move relatively smoothly, unless one didn't actually see the latest train coming, which if one didn't one shouldn't be deciding what is and isn't a pension.

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...... and certainly not as it is now viewed, as an added pension for the future. The market is and always has been too volatile. Property is high risk.

In the absence of a correctly funded Government pension; property is fine as a pension, especially as part of a portfolio. Pensions are the longterm, so is property. Property is not volatile; it's prices still move relatively smoothly, unless one didn't actually see the latest train coming, which if one didn't one shouldn't be deciding what is and isn't a pension.

You miss the point. Property, as with any investment is never "fine" unless you can CHOOSE the right time to cash it in, that time is NOT always negotiable, neither will be the property market at that time, therefore risky and that has always been the same. The more recent troubles are born of greed and more aspirational lifestyle expectations , not necessity as in years gone by.

Edited by bricksandmorter

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it's a paper loss till you sell.

I've heard this one a few times recently, surely overpaying 30%+ on your mortgage for a decade or more would be a really bad result, doesn't really seem to compute though.

Obviously the point you're buying in the cycle is critical, now being deadly, but if houses are at 'normal sustainable' levels, I'd say for most people the property gamble is less hazardous than a stock gamble of similar size.

This point does not seem to be obvious to anyone at all really :blink:

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I've heard this one a few times recently, surely overpaying 30%+ on your mortgage for a decade or more would be a really bad result, doesn't really seem to compute though.

I wouldn't advocate buying now, just saying negative equity doesn't usually stop life in it's tracks

This point does not seem to be obvious to anyone at all really :blink:

Actually it is obvious to millions: 1) 100K into a house to live in for the the rest of my life, err... Ok. 2) 100K into the stock market for who knows what return (oh and yes I'll keep renting right into my retirement on a pension amounting to the square root of f*ck-all, err what?)

No, sorry, I stand by my statement: at the right price and time, buying does make sense to most people.

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Actually it is obvious to millions: 1) 100K into a house to live in for the the rest of my life, err... Ok. 2) 100K into the stock market for who knows what return (oh and yes I'll keep renting right into my retirement on a pension amounting to the square root of f*ck-all, err what?)

No, sorry, I stand by my statement: at the right price and time, buying does make sense to most people.

I'm not disputing anything you said, I was just pointing out that anyone i've spoken to outside of HPC (a small sample :P ) has failed to distinguish betweeen buying reasonably and buying now and simply parroted out the 'its only a paper loss until you sell' line to diminish the imagined impact of any crash.

Edit: I can see my intiial post wasn't really that clear.

Edited by Laughing Man

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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